Sir Keir Starmer’s handpicked Labour leader of “bankrupt” Birmingham City Council has been slammed for “being on holiday in New York” as Europe’s biggest local authority goes into financial meltdown.
John Cotton video-called in for a series of interviews on Tuesday when it is claimed he was out of the country, the day it was announced a section 114 notice had been filed by the council he leads, meaning it is effectively bankrupt.
All new spending will stop immediately with the exception of protecting vulnerable people and statutory services.
The Labour-led council said in June it faces an equal pay liability of between £650 million and £760 million, which is growing at between £5 million and £14 million a month and which is now estimated to be more than £1 billion.
Sources told the Mail Online Mr Cotton, who is said to have been handpicked by Sir Keir Starmer, was on holiday in the US when news broke of the financial disaster.
Gary Sambrook, Conservative MP for Birmingham Northfield, told the paper: “If anyone wants to see how Labour would behave in Government then look no further than Birmingham.
“Starmer’s man was picked without a vote and when things get tough is nowhere to be seen. Labour have bankrupted Birmingham and they’ll do the same to the country.”
The council also faces an in-year financial gap in its budget which currently stands in the region of £87 million.
Speaking to BBC Radio West Midlands, Mr Cotton said the council would “continue to deliver on essential services like children’s safeguarding and social care, social care for adults, education, waste collection, road maintenance and library services”.
The BBC said that Mr Cotton is not in the city due to “longstanding family commitments”, but that statutory services would continue for the city’s 1.1 million taxpayers.
Issues with equal pay settlements at the council have been ongoing for well over a decade.
In 2012, the Supreme Court ruled in favour of 174 low-paid women workers at the council to ensure they were paid equally, which effectively extended the time workers have to bring equal pay compensation claims from six months to six years.
That added to a number of previous equal pay settlements dating back to 2006.
It was estimated at the time that existing and future equal pay claims could cost up to around £750 million, which the council had to borrow hundreds of millions of pounds to settle.
Meanwhile, talks remain ongoing to safeguard the jobs of thousands of staff at the authority, with Unite – which represents hundreds of workers at the organisation – claiming the council’s bankruptcy came as a result of “chronic financial mismanagement”.
Sharon Graham, Unite general secretary, said: “Birmingham City Council’s workers must not pay the price for the council’s or central government’s incompetence and financial mismanagement.
“Our members undertake vital frontline services that are essential for the communities they serve and they should not be impacted through no fault of their own.”
The Conservative Mayor of the West Midlands, Andy Street, said promises from the council to produce a plan for how to settle the liability from the equal pay claims had not been produced.
He said: “The city of Birmingham deserves so much better and, truthfully, I am incredibly concerned that citizens – and the services they rely on – have been let down in this way.”
Birmingham becomes the latest of several councils to issue section 114 notices this century, after Hackney, Northamptonshire, Croydon, Thurrock and Woking.
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